The tax bill hasn’t been posted yet but the House Tax Committee chair is sharing some information about the bill. Rep. Greg Davids, R-Preston, says the measure will keep funding for state aid to cities, known as local government aid, at 2010 levels. That’s similar to the Senate bill that passed in the regular session and less money than Gov. Dayton had proposed in his budget.

Davids also says cities of the 1st class, including Minneapolis, St. Paul and Duluth, will continue to receive funding. The House pushed to remove funding for those three cities, but Davids says Gov. Dayton objected.

“I’m a big believer in local government aids,” Davids said. “That was a struggle because some of the folks in our caucus aren’t real big on local government aid for whatever reason. The governor wanted more. I took everything I could get and that’s what we put in there.”

Davids also says there are tax cuts in the bill. Renters will get a credit for property taxes, there will be direct property tax relief for homeowners and data storage centers will be allowed to exempt sales taxes for energy usage, software and computer equipment. Gov. Dayton and Davids hope that the tax break attracts large data storage companies to Minnesota. The idea is that the state’s cold weather will help keep those computer servers cool.

Davids also said the federal income tax will be factored into future tax incidence studies – a major victory for Republicans who complained that those studies didn’t factor in the amount of money top earners were paying in taxes.

The mechanism that will allow the state to borrow against future tobacco payments will also be in the bill. Davids says he expects criticism, but he said the votes should be there since it’s a lynchpin to the agreement between Dayton and GOP legislative leaders.

“Overall, this is the bill that gets us out of town in good order,” Davids said.

· Tobacco bonds: Included in bill. These allow the state to borrow against future tobacco payments. They are the controversial GOP-backed item that was a cornerstone of the framework agreement.

· Local Government Aid: Restored to 2010 levels for largest cities. – similar to Senate bill but less than governor’s proposal. The House had pushed to remove funding for Minneapolis, St. Paul and Duluth. But LGA for all three remains at 2010 levels.

· Renters’ credits: Will be reduced in future budget years. The credit for property taxes: 19 percent for FY2012, permanently reduced to 17 percent beginning FY2013.

· Property tax: Expands the homeowner property tax refund program. Increases the maximum refund from $2,410 to $2,460. Expands the income range at which the maximum applies. Decreases copayment percentage for most participants.

· Federal income tax: Will be included in future tax-incidence studies – a major GOP victory. Republicans had said such studies didn’t consider the amount of money that wealthy residents were paying in taxes.

· Political Contribution Refund Program: Suspended for two years.

· Counties to fund Maintenance of Efforts at 90 percent of current levels.

About the blogger

Tom Scheck has covered politics and state government for more than ten years for MPR News. He’s covered several gubernatorial campaigns, two statewide recounts, the presidential bids of Tim Pawlenty and Michele Bachmann, U.S. Senate races, close Congressional contests and the Minnesota Legislature. He lives in Falcon Heights with his wife, son and dog. He can sometimes be found chasing a white ball on a golf course. It isn’t a straight walk. Tips are welcome at tscheck@mpr.org